After exactly one year from the first edition of Crowdfuture, the Italian crowdfunding community met again in Rome last Saturday. Five tracks with 45 speakers came together to explore and discuss the, still emerging but already disruptive, phenomenon of crowdfunding. It was also the opportunity to present the updated edition of the “Analysis of Italian Crowdfunding Market”, to date the most complete report on the sector. Ivana Pais, from the Cattolica University, and I presented it during one of the afternoon seminars, in front of a very active and curious audience (you can find the slides here) and we’ve just published the full report that you can view and download for free here (only available in Italian at the moment).

Main points:

– The number of platforms has almost tripled in a year

– The availability of platforms is currently outstripping the availability of suitably prepared projects: rejection rate is very high

– Half of the total value raised by successful projects in the history of Italian crowdfunding has been collected in the last year (11 million Euros)

– There’s a clear and marked predominance of the social lending model: of the total value raised, the 80% is brought in by lending-based portals

– Italian crowdfunding market is growing fast but it has still a long way to go, especially in overcoming cultural barriers and norms

The Italian market for crowdfunding seems to be growing at a very fast pace. From 16 platforms in 2012 we now have 41, of which 27 are active and 14 in their launch phase. Among the active platforms, more than half are reward-based, one-third donation- based and only three are lending-based. Among those launching, the vast majority are equity-based, pushed by the recent publication of the Consob Regulation.

Data were collected from 30 platforms. The number of projects submitted to platforms totaled more than 52,000, of which the vast majority to lending-based platforms. Of these 52,000 projects, less than 15,000 were actually published and the majority of these being reward-based projects. The cumulative value of the projects is growing but remains modest part of the overall global totals raised. This would suggest that the availability of platforms is currently outstripping the availability of suitably prepared projects in Italy. As for the success rate, it’s an average 54% in lending -based, 44% in donations and 24 % in reward -based.

The total value raised by successful projects in the history of Italian crowdfunding amounts to almost 23 million euro, of which more than 11 million has been collected in the last year. Of this total, 80% is brought in by lending-based portals, which also have the highest average value of financed projects (€ 7,892 /project). It should be noted that in Italy lending is consumer lending as commercial (to business lending) is not currently permitted.

Among the trends of crowdfunding in Italy are the growing presence of local and niche platforms and we noted also the emergence of hybrid platforms. ” Do It Yourself ” Crowdfunding is also spreading widely too: two of the most funded projects to date in Italy have been DIY campaigns.

These trends, which in part follow global trends, have ” taken root ” well in Italy probably because (excluding hybrid platforms) they have a strong tie with the community and the territory. This appears to be a necessary aspect for a successful crowdfunding project in Italy, given an apparent lack of trust in the online world whilst, on the other hand, an inclination amongst Italians to be very open and trusting towards people who are part of their more immediate community.

The rapid growth of Italian crowdfunding is not to be seen only from a positive point of view. The clear and marked predominance of social lending perhaps is a reflection of existing cultural norms and a willingness to invest only in projects with a financial return. The high rejection rate of projects would seem to indicate a lack of understanding on the part of project owners as to what is required to successfully run a crowdfunding campaign.” Not surprisingly, the platforms continue to lament the lack of knowledge of crowdfunding at all levels. However, unlike last year, the newer platforms in particular are very active in their educator role, organising events, initiatives and providing resources of various types on their portals. The number of events on crowdfunding has significantly increased and crowdfunding as a subject has featured on the radio and even on national TV in recent months.

However, understandably, the focus of media attention in recent months has concentrated on the equity crowdfunding model and this has had the effect of confusing many to think this is the only option available. The CONSOB regulation has had the great benefit of stimulating further debate on crowdfunding and particularly bringing it to the attention of institutions and Italian mainstream media. There’s still a long way to go. I particularly liked two comments from two of the platforms owners who replied to our questionnaire, which sum up my view on the state of crowdfunding in Italy now and its major obstacle. The first comment said “We are at an embryonic stage of crowdfunding so everything is needed for the later stages“. The other was a response to a question to platforms “Who is your main competitor?”. The answer – “the priest!”.